US growth a puzzle to policymakers

Going strong: A customer browsing at a hardware store in Miami, Florida. The Fed is attentive to signs that the economy may not be cooling with recent consumer spending being especially robust and the housing sector showing signs of picking up. — AFP

JACKSON HOLE (Wyoming): US economic growth, still racing at a potentially inflationary pace as other key parts of the world slow, may pose global risks if it forces Federal Reserve (Fed) officials to raise interest rates higher than expected.

The Fed’s aggressive rate increases last year had the potential to stress the global financial system as the US dollar soared, but the impact was muted by largely synchronised central bank rate hikes and other actions taken by monetary authorities to prevent widespread dollar funding problems for companies and offset the impact of weakening currencies.